* Calmer bond market conditions buoy stocks
* European equity funds had 2nd week of outflows -BoaML
* Roche rallies after positive drug trial results
* Too early to fight against bull market -Citi
By Sudip Kar-Gupta
LONDON, May 15 (Reuters) - European shares advanced on Friday, as calmer conditions in the bond market buoyed the region's stock markets, with drugs group Roche rallying after positive trial results.
The pan-European FTSEurofirst 300 index rose 0.5 percent. Swiss group Roche was among the best performers, climbing 2.8 percent after reporting strong results from cancer drug trials.
Julius Baer also gained 3.3 percent, with traders citing speculation the Swiss bank and financial group could be a target for Intesa Sanpaolo as well as the possibility of a smaller than expected U.S. tax fine. Baer declined to comment.
Investors said signs that jitters in the bond market were starting to recede were also helping prop up European stocks, after an earlier spike in the German bund yield had contributed to second straight week of European equity outflows, according to a survey by Bank of America Merrill Lynch.
Clairinvest fund manager Ion-Marc Valahu said he had cancelled some of his earlier "short" bets on a weakening of Europe's stock market rally.
"We seem to have reached a bottom on the German bund. I've been covering my 'shorts' and getting long on equities," he said.
Record low interest rates and government bond purchases by the European Central Bank (ECB) have kept a lid on the euro and buoyed European stocks.
The weaker euro has benefited European exporters, though European share prices have dropped this week amid signs of a rebound in the currency and on bond yields.
Nevertheless, the FTSEurofirst 300 index remains near its best level in more than 14 years and is up 16 percent since the start of 2015.
Equity strategists at U.S. bank Citigroup said that in spite of signs of bubbles emerging in financial markets, it was too early to go against the prevailing bull market trend in equities.
Europe bourses in 2015: link.reuters.com/pap87v
Asset performance in 2015: link.reuters.com/gap87v
Today's European research round-up (editing by Ralph Boulton and John Stonestreet)